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Haider Jamal

Jun 20, 2024

Iran Will Officially Launch New CBDC Initiative In June

The Central Bank of Iran (CBI) has initiated a public pilot for the Iranian national digital currency, targeting local micropayments. On June 18th, the CBI officially announced the launch of a trial program for a local Central Bank Digital Currency (CBDC), known as the digital Rial. Beginning June 21st, coinciding with the start of the month of Tir, the digital currency will be accessible to banking clients and tourists visiting Kish Island.

 

Full Digitalization

Kish Island, the second largest in the Persian Gulf and a popular tourist destination with approximately 12 million annual visitors, operates as a free trade zone which does not require a visa for many nationalities. As part of efforts to expand the digital Rial pilot initiated in 2023, the CBI aims to integrate the digital currency into everyday transactions on Kish Island, enhancing payment options alongside cash and bank cards.

Unlike traditional electronic money requiring bank accounts and interbank settlements, the digital Rial facilitates instant transfers through barcode scanning and specialized software. This approach aims to simplify payments and bolster security compared to conventional card transactions, marking a significant step toward developing the local digital economy and enhancing domestic micropayment capabilities.

 

Enhancing The Local Infrastructure

The CBI highlighted the role of the digital Rial role in fortifying the local payment infrastructure, rejuvenating electronic currency usage for small-scale transactions, and managing risks associated with private currencies. Notably, the current usage of the digital Rial is confined within Iran itself, emphasizing its intended focus on domestic applications.

In the realm of cryptocurrency policy, Iran has permitted crypto trading while prohibiting its use as a medium of exchange for goods and services. The country has also regulated its local cryptocurrency mining sector since 2018, a move viewed by some U.S. lawmakers as potentially circumventing sanctions, posing national security concerns.

 

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